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CORRUPTION

Nagorno-

Karabakh

Adjara

SouthOssetia

Abkhazia

analytical

No. 78 5 October 2015

■■ Overview of the Anti-Corruption Fight in Armenia 2By Khachik Harutyunyan, Yerevan

■■ Anti-Corruption Measures in the Energy Sector: EITI in Azerbaijan 6By Hannes Meissner, Vienna

■■ Continuity and Change: Corruption in Georgia 9By Alexander Kupatadze, St Andrews, UK

■■ DOCUMENTATIONThe Countries of the South Caucasus in International Corruption-Related Rankings 11

■■ OPINION POLLPublic Opinion on Corruption—Comparison of the South Caucasus Countries 2013/14 15Public Opinion on Corruption in Georgia 2014/15 16

■■ CHRONICLE4 September – 5 October 2015 19

digest

caucasus

Research Centre for East European Studies

University of Bremen

Center for Security Studies

ETH Zurich

Caucasus Research Resource Centers

resourcesecurityinstitute.org www.laender-analysen.de www.crrccenters.org

German Association for East European Studies

Institute for European, Russian, and Eurasian Studies

The George Washington University

The Caucasus Analytical Digest is supported by:

Special Editor: Lili di Puppo

CAUCASUS ANALYTICAL DIGEST No. 78, 5 October 2015 2

Overview of the Anti-Corruption Fight in ArmeniaBy Khachik Harutyunyan, Yerevan

Abstract:According to the NGO Policy Forum Armenia’s estimation, Armenia lost $5.9 billion in 2013 because of corruption, and instead of a GDP of $10.5 billion in 2013, it would have had $16.4 billion, if only it had had a level of governance comparable to Botswana and Namibia.1 On February 19, 2015 Armenia estab-lished a new institutional structure to fight corruption led by the Prime Minister. This new setup requires the adoption of a new, third anti-corruption strategy for Armenia. The implementation of the previous two strategies and their action plans (2003–2006 and 2009–2012) have not brought substantial changes in the fight against corruption and most importantly have not increased popular trust in the effectiveness of fight-ing corruption. This article will examine Armenia’s experience in fighting corruption, and then discuss cur-rent obstacles to success in the context of the new institutional setup.

Overview of the Fight Against Corruption for the 2003–2012 PeriodThe first Anti-corruption strategy and its accompany-ing action plan were adopted on 6 November 2003. The Action plan was foreseen for the period of 2003–2006. This was the very first attempt of the Armenian authori-ties to tackle corruption in a systematic and institution-alized manner. Both the strategy and action plan lacked any concrete benchmarks to monitor the progress of the implementation: it was mainly about creating the legis-lative foundations necessary for effective anti-corruption policy making.2 To measure the effectiveness of the 1st strategy, one can look at the results of the Corruption Perception Index of Transparency International (hereaf-ter CPI), which so far is the most utilized international index to understand the effectiveness of measures and actions taken by countries in the fight against corruption.

During the period of 2003 to 2007, Armenia con-sistently received bad scores. Table 1 lays out the data behind this assertion:

Table 1: Armenia’s CPI Score from 2003 to 2007CPI 2003 2004 2005 2006

Score 3 3.1 2.9 2.9Rank 78 82 88 93Number of countries observed

133 145 158 163

1 Corruption in Armenia. 2014. Policy Forum Armenia. Pages 39, 41. Available at: <http://www.pf-armenia.org/sites/default/files/documents/files/PFA_Corruption_Report.pdf>

2 See OECD. Istanbul Anti-corruption Action Plan. Update about actions to implement the recommendations taken during Decem-ber 2006–September 2007. Page 2. Available at: <http://www.oecd.org/countries/armenia/41720719.pdf>

The institutional setting created during the first strategy basically remained intact during the period of 2009–2012 (second anti-corruption strategy and action plan) and with some modifications remains in place up to now. There were two main bodies established during the first and second strategy, which were tasked to over-see the implementation of the strategy and action plan: the Anti-corruption Council and Anti-corruption Mon-itoring Commission. The Council was chaired by the Prime-Minister and did not have the status of a perma-nent body; rather it was operating on the basis of regular meetings. The Council was a high-level representative body, while the Monitoring Commission was supposed to be operating on a day-to-day basis.

Although the institutional setup was not drastically changed during the second strategy and action plan (2009–2012), both the second strategy and action plan included significant improvements and had concrete benchmarks to measure the progress of the strategy. Indicators for the evaluation of the final results for the implementation of the strategy were linked to Arme-nia’s ranks and scores in the CPI and Control of Cor-ruption Indicator of the World Bank. The objective was to reach 4.1 CPI scores and 0.05 scores for the Control of corruption indicator in 2012.

It remains highly controversial whether these objec-tives were met. The problem is that the CPI method-ology changed in 2012 and scores now are within the range of 1–100 instead of 1.0–10. The score for 2012 was 34 which cannot automatically be translated to 3.4 under the old methodology. Nevertheless, it can be said with full confidence that the 4.1 score under the old CPI methodology does not correspond to a 34 score (the CPI score which Armenia was granted for 2012). Thus, it can be said that the first objective was not achieved.

Regarding the second indicator (Control of corrup-tion, World Bank) the target was not met either. The tar-

CAUCASUS ANALYTICAL DIGEST No. 78, 5 October 2015 3

get for 2012 was to achieve -0.05 while for 2012 Arme-nia received -0.533.

The Current Institutional Setup and New Strategy: Critical AnalysisEarly in 2015 the government adopted Decision no. 195-N by which the structure of the policy bodies involved in coordinating, implementing and monitor-ing of the recently adopted third anti-corruption strat-egy was changed. Now there are three main institutions: the Anti-corruption Council, the Experts Group and a Monitoring Department of Anti-corruption Programs within the staff of the Government. The Anti-corrup-tion Council is assigned the role of main decision-maker and is chaired by Prime Minister Hovik Abrahamyan. It includes various ministers, representatives of the par-liamentary opposition, the Prosecutor General, and the head of the Ethics Commission for High-level Public Officials. As for the participation of civil society, it fore-sees membership for two organizations, but the mem-bership is on a rotating basis.

The composition of the Council raised doubts among members of society about the seriousness of the anti-corruption fight4. Moreover, of the four parliamentary opposition political parties, only one agreed to have a representative in the Council as a member. Similarly, civil society largely boycotted the Council; the only spe-cialized civil society representative in the field—Trans-parency International Anticorruption Center NGO (TI Armenia)—declared that it will participate only in the capacity of an observer and not as a member.5

The mandate of the Expert’s Group is purely tech-nical and it acts as a professional unit to provide the necessary expertise to the Council.6 The Monitoring Department acts as a unit which provides technical and organizational support both to the Anti-corrup-tion Council and the Expert’s Group.

The new Council met for the first time on July 28, 2015, and among other issues decided to include the final draft version of the new Anti-corruption strategy in the agenda of the Government.7 The strategy and

3 Worldwide Governance Indicators. World Bank. Available at: <http://info.worldbank.org/governance/wgi/index.aspx#reports>

4 For example, the former MP from the Heritage political party Armen Martirosyan mentioned: “when wolves become good shepherds for lambs, then we will have a real fight against cor-ruption”. See at: <http://galatv.am/hy/news/119869/>

5 See at: <http://galatv.am/hy/anatylitcs/108829/>6 On the mandate of the Expert’s Group, please see the Regula-

tion on the Manner of Operation of the Expert’s Group. Avail-able at: <http://www.gov.am/files/councils/2.pdf>

7 Minutes of the July 28, 2015 Anti-corruption Council’s meet-ing. Available at: <http://gov.am/u_files/file/councils/ardzanagru tyun.pdf>

action plan, after one year and five months of procrasti-nation, were adopted on September 25, 2015.8 The Anti-corruption strategy and Action plan focus on the period of 2015–2018. The strategy chose four priority sectors to address: collection of state revenues, healthcare, edu-cation and police (only the police function connected with providing services to citizens).

At first glance, both the strategy and action plan, are well-thought out and carefully drafted. The chronic problems for the successful enforcement of anti-cor-ruption strategies in Armenia used to be: lack of polit-ical will; lack of proper monitoring and coordination mechanisms; and lack of necessary financial and human resources.

As for the proper monitoring and coordination mechanisms, the strategy largely resolves this problem. The CPI and World Bank’s Control of Corruption indi-cator will be again employed to measure the overall effec-tiveness of the strategy. Nevertheless, the issue of finan-cial and human resources remains in place. Last but not least, the issue of political will is both the most cru-cial concern and priority number one: the strategy was adopted only on September 25, 2015 after more than a year of procrastination.9

When discussing the strategy, it is necessary to reflect on the feasibility of reducing corruption in the four pri-ority sectors. Armenia needs to register quick progress in the fight against corruption in order to gain public trust toward the effectiveness of the effort. The need of trust is conditioned by the fact that 63 percent of respondents in 2013 mentioned that they do not believe that ordi-nary citizens can make a difference in the fight against corruption10 and the population of Armenia has low trust in politicians.11 In other words, Armenia is one of the most apathetic societies in the world with regards to the fight against corruption.12

In this regard, the feasibility of making progress in the four priority sectors is highly questionable. It is

8 See <http://www.azatutyun.am/archive/news/latest/2031/2031.html?id=27269227>

9 The Concept of Anti-corruption Strategy and Action Plan were adopted on April 10, 2014, while the Strategy was adopted on September 25, 2015. Thus, it is one year and five months.

10 Global Corruption Barometer. Transparency Interna-tional. Available at: <http://www.transparency.org/gcb2013/country/?country=armenia>

11 For public trust in politicians, Armenia has 2.9 points and stands at the 76th position out of 144 countries in the Global Com-petitiveness Report 2014–2015. World Economic Forum. See at: <http://www3.weforum.org/docs/WEF_GlobalCompetitive nessReport_2014-15.pdf> page 113

12 National Integrity System Assessment. Armenia. 2014. Main author-Khachik Harutyunyan. Transparency International Anti-corruption Center NGO. <http://transparency.am/files/publica tions/1430407572-0-563326.pdf> page 33.

CAUCASUS ANALYTICAL DIGEST No. 78, 5 October 2015 4

impossible to have corruption free islands in a country with systematic corruption such as Armenia13. But it is possible to start from a sector which can create a dom-ino effect or chain reaction. None of the four priority sectors has this potential. Even if theoretically Armenia could build a corruption-free higher education sector or healthcare system, it would neither bring quick results nor have a spreading effect on other sectors. The start-ing point for the anti-corruption reforms must be a sec-tor or issue which will start a domino effect and deprive the corruption monster of its food: money.

Daron Acemoglu and James Robinson convincingly argue in Why Nations Fail that “poor countries are poor because those who have power make choices that creates poverty”.14 They go even further and say that the politi-cal and state leaders are making bad choices not by mis-take but on purpose. The validity of this assertion can be seen in the majority of former Soviet countries, and in this sense, Armenia is not an exception but an ordi-nary case. The high perception of corruption correlates with lack of a promising economic situation.

Customs and CompetitionTo portray in an allegoric manner the recommenda-tions in this article, let us imagine two fabled beings: the corruption monster and the integrity angel. Both beings are feed on money. The corruption monster is get-ting fed regularly, while the integrity angel barely has enough to survive. Thus, the monster first of all should be deprived of its food and the angel should be fed bet-ter. This strategy requires, first and foremost, focusing on sectors which initiate the flow of monetary resources: customs and anti-monopoly policy.

Neither of those two sectors received special atten-tion and focus in the strategy, while neglecting them is obviously a wrong choice, because, according to the World Competitiveness Index 2014–2015, the most problematic factor for doing business in Armenia is corruption.15 Regarding competition and monopo-lies, the Berterlsmann Stiftung in its 2014 BTI coun-try report on Armenia notes: “As things stand, Arme-nia lacks the necessary combination of critical laws and effective enforcement, particularly in the area of antimo-

13 Ibid, page 23 and US Department of State, Country Reports for Human Rights Practices for 2014: Armenia. Available at: <http://www.state.gov/j/drl/rls/hrrpt/humanrightsreport/index.htm?year=2014&dlid=236496#wrapper>

14 Daron Acemoglu and James Robinson. Why Nations Fail.. 2012. Page 83

15 Global Competitiveness Report 2014–2015. World Economic Forum. See at: <http://www3.weforum.org/docs/WEF_Global CompetitivenessReport_2014-15.pdf> page 112

nopoly and antitrust law”. 16 Additionally, the Nations in Transit 2015 report on Armenia explicitly mentions:

“Major industries and the foreign trade sector remain dominated by monopolies, creating ample opportuni-ties for corruption”.17

Regarding customs, according to the Doing Busi-ness 2015 report on Armenia, for a standard shipment of goods, it takes exporters 16 days and 1,885 USD to export, while importers need 18 days and 2,175 USD.18 The same report mentions that Armenia, with a score of 68.81 points for trading across borders, stands at 110 in the ranking of 189 economies in the world.19 Its neigh-bor Georgia has 84.02 points and stands 33rd in the ranking, which is an impressive result.20

The “cleaning” of those two sectors will enable small and medium enterprises to trade more and will pro-vide incentives for getting involved in entrepreneur-ship. This, in turn will assist the formation of a middle class, which is a guarantee against vote buying. Under this scenario, vote buying incidents during elections will drastically decrease (depending on the size of the middle class). Fair elections will deliver more account-ability from political parties and individual candidates, which in turn will result in a more accountable parlia-ment and government.

In addition to those two sectors, there is one more sector which is indirectly linked: protection of employ-ees by having vibrant trade unions in place. In regard to trade unions, the National Integrity System Assessment 2014 report on Armenia notes: “There are even fewer known unions of legal entities and no actually visible trade unions”.21 This issue is totally missing from the strategy, while it is an essential sector in countering the monopoly power of oligarchs.

Another sector which wrongfully is left out of the strategy as a priority is the judiciary. Armenia, with 2.9 points, stands at 107th place among 144 countries in

16 Bertelsmann Transformation Index 2014. Armenia country report. Bertelsmann Stiftung. Availablet at: <http://www.bti-project.org/reports/country-reports/pse/arm/index.nc>

17 See at Nations in Transit 2015. Armenia, Country Report. Free-dom House. Available at: <https://freedomhouse.org/report/nations-transit/2015/armenia>

18 See Table 9.2. Summary of predefined stages and documents for trading across borders in Armenia at page 69. Doing Busi-ness 2015. Economy profile 2015. Armenia. World Bank Group. Available at: <http://www.doingbusiness.org/data/exploreecon omies/armenia/~/media/giawb/doing%20business/documents/profiles/country/ARM.pdf>

19 See ibid, page 100.20 See ibid.21 National Integrity System Assessment. 2014. Armenia. Main

Author: Khachik Harutyunyan. Transparency International Anticorruption Center NGO. Page 160. Available at: <http://transparency.am/files/publications/1430407572-0-563326.pdf>

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its ranking for judicial independence, according to the World Competitiveness Index 2014–2015.22 Its neigh-boring Georgia for the same indicator stands at 65th place23 and even Azerbaijan, which is considered as a country of the region where the political persecution of independent thinkers is an ordinary thing, stands in front of Armenia with 3.2 points and occupies the 99th position24. Thus, the situation of Armenia, in regard to the judiciary is extremely bad.

ConclusionsPolitical will is the main prerequisite for an effective anti-corruption effort in any country. The previous two

anti-corruption strategies of Armenia failed to bring sub-stantial results. The new strategy does not prioritize the sectors necessary for success: customs; anti-monopoly policy, the judiciary and trade unions. Instead of these for sectors, the Government prioritized four other sec-tors which do not have the potential to start a domino effect and clean other sectors.

The Government of Armenia should act quickly and make the anti-corruption fight in the country visible and inclusive by focusing on the sectors which must be tackled first.

About the AuthorKhachik Harutyunyan (University of Zurich, Master of Advanced Studies in International Organizations) is an anti-corruption expert from Armenia. He is co-author of two fundamental studies on good governance and anti-corrup-tion in Armenia, as well the main author of the recent fundamental study “National Integrity System Assessment 2014. Armenia”. He also is one of the co-authors of the Concept Paper on the Anti-corruption Strategy of Armenia.

Further Reading• Bertelsmann Transformation Index 2014. Armenia country report. Bertelsmann Stiftung. <http://www.bti-proj

ect.org/reports/country-reports/pse/arm/index.nc>• Corruption in Armenia. 2014. Policy Forum Armenia. Available at: <http://www.pf-armenia.org/sites/default/files/

documents/files/PFA_Corruption_Report.pdf>• Corruption Perception Index. Transparency International. <http://www.transparency.org/cpi2014>• Doing Business 2015. Economy profile 2015. Armenia. World Bank Group. <http://www.doingbusiness.org/data/

exploreeconomies/armenia/~/media/giawb/doing%20business/documents/profiles/country/ARM.pdf>• Draft Anti-corruption Strategy of the Republic of Armenia and 2015–2018 Action Plan. <http://moj.am/legal/

view/article/807>• Global Corruption Barometer. Transparency International. <http://www.transparency.org/gcb2013>• Minutes of July 28, 2015 Anti-corruption Council’s meeting. <http://gov.am/u_files/file/councils/ardzanagru

tyun.pdf>• National Integrity System Assessment. Armenia. 2014. Main author—Khachik Harutyunyan. Transparency Inter-

national Anticorruption Center NGO. <http://transparency.am/files/publications/1430407572-0-563326.pdf>• Nations in Transit 2015. Armenia, Country Report. Freedom House. <https://freedomhouse.org/report/

nations-transit/2015/armenia>• OECD. Istanbul Anti-corruption Action Plan. Update about actions to implement the recommendations taken

during December 2006–September 2007. <http://www.oecd.org/countries/armenia/41720719.pdf>• Regulation on the Manner of Operation of Anti-corruption Council, Expert’s Group and RA Government’s Staff’s

Department of Monitoring of Anti-corruption programs. <http://www.gov.am/files/councils/2.pdf>• The Global Competitiveness Report 2014–2015. World Economic Forum. 2014• US Department of State, Country Reports for Human Rights Practices for 2014: Armenia• Daron Acemoglu and James Robinson. Why Nations Fail. 2012• Worldwide Governance Indicators. World Bank. <http://info.worldbank.org/governance/wgi/index.aspx#reports>

22 The Global Competitiveness Report 2014–2015. World Economic Forum. 2014. <http://www3.weforum.org/docs/WEF_GlobalCompeti tivenessReport_2014-15.pdf> page 113

23 Ibid, page 189.24 Ibid, page 411.

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Anti-Corruption Measures in the Energy Sector: EITI in AzerbaijanBy Hannes Meissner, Vienna

Abstract:Azerbaijan eagerly joined the Extractive Industries Transparency Initiative (EITI) because doing so helped legitimate the election of President Ilham Aliev in 2003. Since EITI focused on transparency in government revenue, it did not harm the elite’s ability to spend state money in corrupt ways. Accordingly, the initiative failed to ensure that oil money went to society’s benefit and, as the government began to intensify its crack-down on local civil society, EITI downgraded Azerbaijan from its once exalted status. Since Azerbaijan now views itself as a rising regional power, and is less concerned about its standing within the international com-munity, it is not clear if the EITI downgrade will influence government actions.

Corruption Patterns in Azerbaijan and the EITIIn Azerbaijan, corruption is structurally rooted, affect-ing almost all spheres of public life. The majority of gov-ernment institutions are badly affected. There are only some isolated areas kept free from corruption, such as the State Oil Fund, the State Exams Committee, the Diplomatic Service and a recently established agency for public service delivery, ASAN. The government pur-posely upholds these institutions as best practise show case examples. However, as corruption is highly central-ised, the ruling elite plays a major role in related practises.

Regarding corruption channels, a major difference can be drawn between general corruption outside the oil and gas sector and corruption strategies related to the country’s wealth of natural resources. General cor-ruption practises go back to Soviet (and pre-Soviet) rule and can be found in many resource-poor countries in the post-Soviet space. They are related to a centralised system of bribes. In this context, people pay money in order to get their matters arranged more quickly and more effectively, or to gain material advantages at the expense of others. Besides, public positions are sold. Parts of the money then flow upward in the informal pyramid system that pervades the public sector. How-ever, in Azerbaijan, such practises have obviously lost importance during the last couple of years. The estab-lishment of the ASAN Service Centres was a milestone in this context. Moreover, both locals and foreign busi-nesspeople report that it has become more difficult to get (small) things done, as there are fewer informal contact persons present today. The decrease in low level petty corruption goes hand in hand with a slight improvement in the country’s Transparency International Corruption Perceptions Index (CPI). While the 2010 CPI ranked the country 134 out of the 178 states that it tracks, the country was ranked 126 out of 175 countries in 2014.

The general view is that these improvements have taken place as the ruling elite are less dependent on such sources of income today. In fact, the influx of huge oil

incomes since 2006 has opened up new, and enhanced old, business and rent-seeking opportunities. In Azer-baijan, the president informally acts as the central power broker between the seven most influential persons/fam-ilies and their clientelistic networks. While two of these groups are mainly political actors, two other groups are solely active in the business sphere with large holdings. The other three players unite both political and economic power, as they are not only ministers, but also control huge holdings. Besides legal business activities, these groups are engaged with the private consumption of oil and gas incomes at the expense of the society. In this context, corruption patterns are centred on the expen-diture side of public resources, particularly when huge sums are directed from the intransparent state-budget into in the country’s bloated construction sector, con-trolled by the ruling elite’ own enterprises. According to insiders, 40 percent of the over 13 billion U.S. dol-lar state budget of 2009 was spent on public invest-ment projects. An estimated 70 percent of this money was spent inefficiently, disappearing in murky channels.

Rent-seeking and inefficiency in public resource man-agement are problems characteristic of most resource-rich countries worldwide. As such, these are problems, the Extractive Industries Transparency Initiative (EITI) directly addresses. The initiative claims that natural

“resources can lead to economic growth and social devel-opment. However, when poorly managed they too often lead to corruption and even conflict”. As a response to that, EITI was launched to ensure that all citizens see results from the extraction of their natural resources. To improve openness and accountability in the management of revenues from natural resource production, EITI pro-vides an institutional framework for cooperation between three stakeholder groups, in particular extracting com-panies, governments of resource extracting countries and the local civil society. The initiative addresses transpar-ency at the income side of public resources, as it ensures the full disclosure of taxes and other payments made by extractive companies to governments.

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The following discussion deals with the EITI in Azer-baijan. The next section sums-up the history and the cur-rent status of EITI implementation in Azerbaijan. This is done very briefly, since the EITI Validation report avail-able online offers an in-depth documentation of EITI implementation in Azerbaijan. Subsequent sections go beneath the surface. What are the initiative’s outcomes and non-intended side effects in this particular coun-try case? This article draws on recent publications and background conversations as well as on field research carried out in Baku in 2009 and 2010.

EITI Implementation in AzerbaijanFor a long time, Azerbaijan was praised as an “EITI pio-neer and pilot country”. In fact, EITI implementation was favoured by the fact that the government regularly expresses its willingness to carry out reforms. Both domes-tically and internationally, President Ilham Aliyev declares his strong support to transparency and efficiency in rev-enue management to the benefit of the entire population. At the first “EITI-conference” on 17 June 2003 in Lon-don, Ilham Aliyev announced the government’s decision, to take part in the EITI and to actively support all inter-national efforts to enhance transparency in the extracting industries. Azerbaijan became a candidate country in 2007. As a result of rapid EITI implementation, Azerbaijan was awarded compliant status as the first country worldwide on 16 February 2009. The audit report concluded “that Azerbaijan has complied with all the indicators contained in the Validation Guide and that additionally, the pro-cess is consistent with the EITI’s Principles and Criteria”.

However, on 15 April 2015, Azerbaijan was graded down to Candidate Country again, following reports of interference in NGO functioning. During the last decade, Azerbaijan has seen a continuous and gradual increase in authoritarianism. However, against the background of the Arab Spring, the Maidan revolution and economic crisis due to recent oil price shocks, the government has significantly increased pressure on civil society. As the lat-est EITI validation report puts it, in order to resume their role in EITI, the national NGO Coalition (“EITI Coali-tion”) members have to be able again to access their bank accounts and register new grants for EITI implementation activities; speak freely about the EITI process and express views without fear of reprisal or harassment; and organise trainings, meetings and events related to the EITI process.

OutcomeThe question of the outcome of EITI in Azerbaijan addresses two basic aspects. Firstly, did the initiative enhance transparency and efficiency in public resource management? Secondly, does the initiative strengthen civil society? Point two is also crucial, as the initiative not only

aims at short-term results, but also at creating a critical public in order to push the government to more transpar-ency and efficiency from the “bottom-up” in the long term.

In terms of question one, it was a common view among local experts in Baku in 2009/10 that the EITI is inadequate to ensure transparency, efficiency and sus-tainability in revenue management. As a Western diplo-mat in Baku pointed out, he “doubts whether the EITI is the right instrument to guarantee transparency”. He, as well as other experts, pointed to the reason that EITI is limited to transparency in the field of revenues, while the ruling elite can persist with its corruption and rent-seeking interests in the field of expenditures. As a former member of the EITI Board put it, “EITI relates to one aspect of transparency only”. In fact, “the problems with corruption persist, as the expenditure side is more sen-sitive (in the case of Azerbaijan).” A leading member of the national NGO Coalition was particularly sceptical:

“Before the EITI was implemented, the government insti-tutions could do with the oil revenues what they wanted. As the initiative has been implemented now, nothing has changed in this regard. (…) Given that, we do not believe that the EITI process will have a deeper impact on society.”

Despite this, the vast majority of local NGOs contin-ued their work in the “EITI Coalition”. The head of an opposition party underlined his pragmatic view, stressing that if the EITI did not exist, “the entire situation would be even worse.” Unlike in the past, basic information on oil revenues is now available. Moreover, as several NGO leaders positively highlighted, EITI created a platform, enabling the exchange their own positions with those of the government. This is, in fact, a major opportunity of the initiative. Cooperation frameworks, within which companies and civil society can work together with the respective government are usually weak or do not exist at all in authoritarian environments. However, in recent years, EITI in Azerbaijan turned out to be incapable of maintaining a minimum degree of political freedom, necessary for such cooperation frameworks to work. It remains to be seen whether the country’s downgrade to Candidate Country will generate enough political pres-sure on the government to change this.

Already before the recent clampdown on civil society, in 2009/10, local observers were sceptical about whether the initiative could strengthen civil society and create a critical public. Some argued that the civil society of Azerbaijan is too weak to use the EITI as a first step in promoting transparency. As the head of an opposition party criticised, “civil society has no mechanisms at all to ensure public control over oil management. We have to admit that there is no real civil society and no transpar-ency. The president (of Azerbaijan) is the one who takes any decision. It (the oil money) is his money”. Others

CAUCASUS ANALYTICAL DIGEST No. 78, 5 October 2015 8

noted that “nobody living in the countryside of Azerbai-jan is interested in the opinion of the EITI Coalition any way” and that they “are not even aware of its activities”.

Non-Intended Side EffectsAs a local civil society representative in Baku criticised,

“the government could not wait joining the EITI”, as they realised that the “initiative is not adequate to tackle cor-ruption and to bring more influence to civil society” while, at the same time, bringing about considerable advantages for them. Several civil society experts in Baku highlighted that the government uses the EITI to boost its own image. As a member of the EITI Board put it, “when you are `number one´ in the EITI, it means that you are trans-parent”. A local finance expert criticised, in this way, the government “misuses the EITI as imitation”. The regional coordinator of an institute working on revenue transpar-ency took a similar view, highlighting that the govern-ment uses the EITI “as shield against criticism”. A leading member of the local EITI Coalition, in turn, pointed out that the EITI “allows the government to cover its corrup-tion practises” and “to boost its image at the international level.” However, there is another problematic aspect in his eyes. “By being committed to the EITI, they send the sig-nal to the population that they are transparent. (…) They demonstrate, even if there are people in Azerbaijan not satisfied with their style of governance, the entire inter-national community supports them.”

In other words, the government uses the EITI to legitimise its rule both externally and internally. Accord-ing to a local finance expert, the best example of this were the events surrounding the illegitimate transfer of power from the former president Heydar Aliyev to his son Ilham by rigged elections in 2003. This was a criti-cal juncture for the ruling elite’s hold on power. For this reason, the government tried to strengthen its position at the international level. “For the president, the EITI (that had just been launched) offered an opportunity to integrate himself into the international community.”

Particularly in the early years, the EITI fell on fer-tile ground in Azerbaijan, as international recognition is

important to the government to a certain degree. Besides, it also fulfilled economic purposes. As a local finance expert highlighted, Azerbaijan shall become econom-ically attractive to foreign investors as a hub between Europe, the USA and Asia. However, during the last cou-ple of years, such aspects increasingly lost importance. This is related to the government’s new self-image as a rising political and economic power in the region, less responsible to the international community.

ConclusionsIn Azerbaijan, EITI has been successful in guaranteeing transparency on the revenue side of public resources. How-ever, the ruling elite can persist with its corruption and rent-seeking practices in the field of expenditures. Only if EITI is extended to the expenditure side, it will ensure transparency and efficiency in public resource management. Although the new “2013 Standard” cautiously tries to expand the ini-tiative, the focus remains on revenue transparency.

However, if the EITI is extended to the expenditure-side, the question will arise of how to force governments to implement the initiative. The Azerbaijani government was willing to implement the initiative for the reason that EITI brings about significant political and economic advantages, while, at the same time, not posing any real threat to the ruling elite’s hidden interests. In this context, the initiative has even had non-intended contra-productive side-effects.

A major opportunity of EITI lies in creating a coop-eration framework between companies, civil society and governments. However, the initiative can only strengthen civil society in the long-run, when there is a minimum degree of political freedom. In Azerbaijan, this is not the case anymore. Consequently, EITI has come under pressure to take actions against Azerbaijan. However, the government’s new self-image as a rising political and eco-nomic power in the region and threats to quit the EITI raise doubts as to whether Azerbaijan’s downgrade to Candidate Country will change this constellation.

About the AuthorHannes Meissner works as a senior researcher and lecturer at the Competence Centre for Black Sea Region Studies, Univer-sity of Applied Sciences BFI Vienna. This analysis draws on material of his PhD thesis (published by LIT Verlag) about the resource curse and the future of initiatives to enhance accountability and transparency for oil and gas revenues (EITI etc.), which he concluded at the University of Hamburg and the German Institute of Global and Area Studies (GIGA).

Further Reading:• A longer version of this publication as a conference paper from the Third Global Conference on Transparency Research:

<http://campus.hec.fr/global-transparency/wp-content/uploads/2013/10/Paper-Meissner-Transparency-Initiatives-v2.pdf>• Toby McIntosh: EITI, OGP Face Challenges Handling Civil Space Issues, <http://www.freedominfo.org/2014/11/

eiti-ogp-face-challenges-handling-civic-space-issues/>

CAUCASUS ANALYTICAL DIGEST No. 78, 5 October 2015 9

Continuity and Change: Corruption in GeorgiaBy Alexander Kupatadze, St Andrews, UK

Abstract:Georgia has become one of the least corrupt countries in Eastern Europe. The Georgian Dream govern-ment has continued to maintain and upgrade public service standards to ensure low levels of bribery in the sectors where state and citizenry interact. However, as in the era of Mikheil Saakashvili’s United National Movement (UNM), concerns remain about the particularistic distribution of public resources and various forms of ‘legalised corruption’. This article analyses the changes as well as the continuity of practices since the defeat of the UNM government in October 2012.

Policy ChangesThe anti-corruption policy of the Georgian Dream (GD) government prioritises long-term planning and engage-ment with a wider spectrum of stakeholders than did the UNM top political leadership, which combined decisive and quick actions on the ground with concentrated deci-sion-making. Saakashvili’s post-Rose Revolution gov-ernment had low regard for anti-corruption strategy on paper and largely rejected the advice of various interna-tional institutions that advocated a slow pace of reform. In contrast, the Georgian Dream government started to work on a long-term strategy straight away and adopted its 2015–16 anti-corruption action plan in April 2015.

Another policy shift is the abandonment of libertar-ian policies. The new government has adopted a number of new regulations for businesses, including in the con-struction and food production sectors, which increase monitoring and safety standards, but ultimately also may increase corruption risks.

Despite these changes, the continuation of signif-icant unethical and corrupt practices can be observed since the new government came to office in 2012. Importantly the public exposure of these practices also increased due to a more open and critically-oriented media, particularly Rustavi 2 and Tabula TV, and effec-tive NGOs, such as the Georgian chapter of Transpar-ency International and the Institute for the Develop-ment of Freedom of Information (IDFI).

Collusion between Politics and BusinessEven though the government made steps to increase the transparency of the public procurement system, numer-ous cases suggest that collusion between politicians and businessmen, especially at the regional level, undermines and corrupts the process. Companies directly or indi-rectly owned by high ranking officials often win pub-lic procurement contracts, especially through tenders which are exempt from the requirements of open and competitive bidding and which can be implemented through simplified procedures, leaving more room for the discretion of public officials. The media revealed

many such cases in the regions as well as in the capi-tal Tbilisi. For example, in Senaki two companies both linked with the local head of the Georgian Dream polit-ical party won public tenders in 2014. In Gori compa-nies owned by the mayor’s brother-in-law won a sim-plified public procurement contract. Ironically the public tender commission did not forget to make a dis-claimer about the absence of conflicts of interests.1 In June 2015 Koba Arabuli, the vice-governor of Mtskheta-Mtianeti region, spoke about the widespread corruption related to public tenders in his region. According to him, much more money is allocated to repair and construc-tion works than is needed. For example, more than 2.5. million GEL was allocated for the construction of the 2.5 km long road in Dusheti while only 100,000 GEL is allocated for similar work in other projects. He alleged that the MPs elected from regional precincts are often involved in these cases and influence the outcomes of public tenders. However later, after attending a meeting of the GD political council, Arabuli retracted his alle-gations and said that his statement about the MPs was ‘misinterpreted.’2 In March 2015 the newly appointed Deputy Minister of Infrastructure Nodar Javakhishvili admitted that ‘lots of money is made on road construc-tion related to public tenders.’ In the majority of these cases the required work is not done properly and pub-lic money is pocketed by individuals and companies.

Similar to the UNM era, the companies that often win public tenders also contribute to the coffers of the ruling Georgian Dream coalition. For example, the own-ers of Nil LTD have transferred more than 120,000 USD to GD after winning public tenders worth three million USD in 2013–14.3 Hence public-private collusion and manipulating the state in private or group interest con-tinues, but before October 2012 the purpose was consol-idating political power, rather than private profiteering.

1 <http://www.trialeti.ge/?menuid=2&id=3506&lang=1>2 <http://www.interpressnews.ge/ge/sazogadoeba/332414-mck

hetha-mthianethis-gubernatoris-pirveli-moadgile-tenderebis-kanondarghvevith-gamarthvaze-saubrobs.html?ar=A>

3 <http://forbes.ge/news/530/gasaocari-demokratia-fulis-tyveobaSi>

CAUCASUS ANALYTICAL DIGEST No. 78, 5 October 2015 10

For example, in 2013 Tbilisi Mayor Gigi Ugulava was charged with misspending USD 28.2 million in public funds from the capital city’s development fund in 2011–12 by illegally channeling money to the UNM and its activists by creating fictitious jobs (Civil Georgia 2013).

Open abuse of public funds to help a specific polit-ical party are less common nowadays because the rul-ing coalition is funded by a billionaire oligarch. Instead, state capture is more ‘privatised’—particular companies or networks are influencing state behaviour to extract private benefit. For example, in 2013 the Culture Min-istry and president’s office stripped one of the world’s oldest gold mines in Sakdrisi of its status as an archeo-logical site of national importance thereby allowing the RMG company to illegally starting mining operations there. According to the NGO Green Alternative, RMG and its legal predecessors, Madneuli JSC and Quartzite LTD, benefited from illegal political connections under both the UNM and GD governments. In another case, the government tried to establish administrative and legal barriers on the market to give the Georgian Postal Service a privileged position. These kinds of cases raise concerns about state capture by private interests and the related risks of corruption.

More importantly, the ‘Zedelashvili-Jankarashvili clan,’ the group of former government and GD officials who are close relatives of Prime Minister Garibashvili, is widely believed to influence policies and various state institutions for the sake of private benefit. The network has a significant degree of control in a number of key government ministries, including the Ministry of the Interior and the Ministry of Infrastructure. The lat-ter grants most of the lucrative public contracts, while the former fights against corruption [at least that was its task before the summer of 2015, when the Minis-try of Security was established to handle this function]. Unsurprisingly the companies owned by the key actors of this network, as the case of Serpatine LTD suggests, have been widely reported to disproportionally bene-fit from public procurement contracts.4 Unfortunately some of these corrupt practices go beyond the ‘revolv-ing door’ phenomenon because, apart from leveraging networks for illicit benefit, there have been illegal take-overs of businesses and forcing competitors to give up market share through blackmail and the use of the crim-inal justice system.

So far, the GD government’s anti-corruption efforts have mainly focused on members of the Saakashvili gov-ernment. This selective justice exacerbates perceptions of politically-motivated prosecutions because since Octo-

4 <http://www.netgazeti.ge/GE/105/News/38556/>; <http://pirve liradio.ge/?newsid=19613>

ber 2012 there has not been a single high-profile cor-ruption prosecution among the ranks of the GD gov-ernment. The current situation stands in contrast to the prosecution of 6 members of Parliament and 15 acting deputy ministers from 2004 to 2010. The GD leader-ship often prefers to deal with corruption cases quietly, without much public discussion. In the case of scandals related to the Zedelashvili-Jankarashvili clan, the GD political leadership decided to cut its influence by sack-ing its key members from government positions rather than going through the due legal process of examin-ing and investigating the publicly available evidence of corruption.

Nepotism and BonusesPayment of large bonuses to high ranking officials is another form of ‘legalised corruption’ that has been per-petuated. The practice resembles political clientelism because there are no criteria for determining and award-ing excellence in public office, so decisions are mainly based on discretion. The bonus payments made by the heads of these institutions disproportionally benefit the leadership of the ministries and departments in a manner that resembles a patron’s distribution of resources to his own clientele rather than incentivising performance. In certain instances the spending for bonuses increased after the change of government. For example, in Tbilisi more than 18.2 million Georgian Laris have been spent for bonuses in 2014 compared to 7.2 million GEL in 2012. However, in other regions, such as the Achara Autono-mous Republic, the overall value of similar payments has been decreasing. In July 2015 the government passed a decree to regulate the system of bonuses in the public sector. However the decree just provided the definition and stipulated the conditions under which bonuses can be granted without providing specific criteria for deter-mining what constitutes ‘outstanding performance.’ As a consequence of the government’s new regulations, in many public institutions the old system has been kept intact, but the terminology changed—bonuses are now referred as ‘lagniappes’ or ‘inducements.’

Nepotism is perceived to be on the rise. The 2013 pub-lic opinion poll administered by the Caucasus Research Resource Center showed that 30 percent of the respon-dents think ‘connections’ is most important factor in getting a good job, up from 19 percent in a similar sur-vey conducted in 2011. Perceptions about the impor-tance of connections have likely increased for several rea-sons: more exposure of nepotistic practices by the media and NGOs; public statements of high-ranking officials, including former Prime Minister Ivanishvili and his suc-cessor Garibashvili describing nepotism as an acceptable practice; and, perhaps most importantly, a growing con-

CAUCASUS ANALYTICAL DIGEST No. 78, 5 October 2015 11

sensus among observers that the cases of nepotism have genuinely increased. Nowadays nepotism plays a deci-sive role in hiring as well as promoting public employees. However one needs to acknowledge that the practices vary from institution to institution and some ministries do better than the others, as one recent study found.5

ConclusionOverall Georgia is stuck somewhere between neo-patri-monialism, namely a particularistic governance regime

with the state captured by private interests and a distri-bution of resources that benefits privileged individuals, and ethical universalism, under which there is an impar-tial governance regime based on the norms of fairness and citizen equality and the state remains autonomous from private interests (Mungiu-Pippidi 2013).

About the AuthorDr Alexander Kupatadze is a lecturer at the School of International Relations, St Andrews University since 2014. Pre-viously he held postdoctoral positions at George Washington University (2010–11), Oxford University (2012–13) and Princeton University (2013–14). He is also an affiliate fellow at the Extralegal Governance Institute, Oxford Univer-sity, and a member of the Global Initiative against Transnational Organised Crime.5

Bibliography• Civil Georgia, 2013. 20 January available at <http://www.civil.ge/eng/article.php?id=25660>• Green Alternative, Natural Resource Management and Factors Conducive to Elite Corruption, Research funded

by the Open Society Georgian Foundation, Tbilisi, 2015.• Mungiu-Pippidi, A. (2013). Controlling corruption through collective action. Journal of Democracy, 24(1), 101–115.• Transparency International Georgia, Competition policy: the Georgian postal service market, February 2015.

5 <https://gipa.ge/uploads/files/kvleva_sajaro%20samsaxuri.pdf>

The Countries of the South Caucasus in International Corruption-Related Rankings

Corruption Perceptions Index

Prepared by: Transparency InternationalEstablished: 1995Frequency: AnnualThe data refer to the previous 24 months.Covered countries: at present 175URL: <http://www.transparency.org>

Brief Description:The Corruption Perceptions Index is a composite index that draws on multiple expert opinion surveys that poll per-ceptions of public sector corruption in countries around the world. It originally scored countries on a scale from zero to ten, with zero indicating high levels of perceived corruption and ten indicating low levels of perceived corruption. Since 2012 countries are scored from 0 (highly corrupt) to 100 (very clean). To ensure comparability the previous data were subsequently multiplied by the factor 10.

DOCUMENTATION

CAUCASUS ANALYTICAL DIGEST No. 78, 5 October 2015 12

Figure 1: Corruption Perceptions Index 2014: Scores and Rankings of Selected Countries

61

52

51

43

37

36

31

29

29

27

27

26

23

18

17

35

50

53

69

94

100

119

126

126

136

136

142

152

166

169

Poland

Georgia

Czech Republic

Romania

Armenia

China

Belarus

Azerbaijan

Kazakhstan

Kyrgyzstan

Russia

Ukraine

Tajikistan

Uzbekistan

Turkmenistan

70 (figure in column) = score25 (figure in box) = ranking

highly corrupt very clean

Figure 2: Corruption Perceptions Index 1999–2014: Scores

0

10

20

30

40

50

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Georgia

Armenia

Azerbaijan

high

ly c

orru

ppt

very

cle

an

Table 1: Corruption Perceptions Index 1999–2014: Scores

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Georgia 23 * * 24 18 20 23 28 34 39 41 38 41 52 49 52

Armenia 25 25 * * 30 31 29 29 30 29 27 26 26 34 36 37

Azerbaijan 17 15 20 20 18 19 22 24 21 19 23 24 24 27 28 29

Note: Missing values for Armenia (2001 and 2002) and for Georgia (2000 and 2001) have been replaced with moving averages.

CAUCASUS ANALYTICAL DIGEST No. 78, 5 October 2015 13

Freedom House: Nations in Transit

Prepared by: Freedom House (Washington, USA)Established: 1997Frequency: AnnualThe data refer to the respective previous year.Covered countries: at present 29 URL: <http://freedomhouse.org/reports>

Brief Description:Nations in Transit measures progress and setbacks in democratization in countries and territories from Central Europe to the Eurasian region of the Former Soviet Union. The rating covers seven categories: electoral process; civil soci-ety; independent media; national democratic governance; local democratic governance; judicial framework and inde-pendence; and corruption. The ratings are based on a scale of 1 to 7, with 1 representing the highest and 7 the low-est level of democratic progress.

Figure 3: Nations in Transit: Corruption in 2015 (Selected Countries)

3.50

3.50

3.75

4.50

5.25

6.00

6.25

6.25

6.25

6.50

6.75

6.75

6.75

6.75

1 2 3 4 5 6 7

Czech Rep.

Poland

Romania

Georgia

Armenia

Ukraine

Belarus

Kyrgyzstan

Tajikistan

Kazakhstan

Azerbaijan

Russia

Turkmenistan

Uzbekistan

more democratic progress less democratic progress

Table 2: Nations in Transit: Corruption 2001–2015

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Armenia 5.75 5.75 5.75 5.75 5.75 5.75 5.75 5.75 5.50 5.50 5.5 5.25 5.25 5.25 5.25Azerbaijan 6.25 6.25 6.25 6.25 6.25 6.25 6.25 6.26 6.50 6.50 6.50 6.50 6.75 6.75 6.75Georgia 5.25 5.50 5.75 6.00 5.75 4.75 5.00 5.00 5.00 5.00 4.75 4.50 4.50 4.50 4.50

CAUCASUS ANALYTICAL DIGEST No. 78, 5 October 2015 14

Worldwide Governance Indicators

Prepared by: World BankEstablished: 1996Frequency: Annual, between 1996 and 2002 every two years.The data refer to the corresponding year of evaluation and are published one year later. Data for 2014 are not yet available.Covered countries: at present 215URL: <http://info.worldbank.org/governance/wgi/index.asp>

Brief Description:This index measures six dimensions of governance. The indicators are based on several hundred individual variables measuring perceptions of governance, drawn from 31 separate data sources constructed by 25 different organizations. The relevant index value shows the average of all relevant sources according to their reliability. Virtually all scores lie between -2.5 and 2.5, with higher scores corresponding to better outcomes.

A number of revisions to the underlying source data have been made since 2011. The deletions from and revisions to the data from previous years on average have only minimal effects on the 1996–2009 data.

Figure 4: Worldwide Governance Indicators—Control of Corruption 2013 (Selected Countries)

0.55

0.36

0.19

-0.2

-0.47

-0.52

-0.9

-0.9

-0.99

-1.09

-1.12

-1.19

-1.23

-1.34

-1.5 -1 -0.5 0 0.5 1

Poland

Georgia

Czech Rep.

Romania

Armenia

Belarus

Kazakhstan

Azerbaijan

Russia

Ukraine

Kyrgyzstan

Tajikistan

Uzbekistan

Turkmenistan

CAUCASUS ANALYTICAL DIGEST No. 78, 5 October 2015 15

Figure 5: Worldwide Governance Indicators: Control of Corruption 1996–2013

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

1996 1998 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Georgia

Armenia

Azerbaijan

mor

e co

rrup

ptio

nle

ss c

orru

ptio

n

Table 3: Worldwide Governance Indicators: Control of Corruption 1996–20131996 1998 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Armenia -0.48 -0.74 -0.66 -0.65 -0.55 -0.62 -0.64 -0.60 -0.73 -0.61 -0.57 -0.67 -0.62 -0.53 -0.47Azerbaijan -1.26 -1.13 -1.10 -1.06 -0.94 -1.08 -0.99 -0.98 -1.02 -1.02 -1.10 -1.17 -1.13 -1.07 -0.90Georgia -1.39 -0.79 -0.88 -1.14 -0.69 -0.60 -0.36 -0.08 -0.24 -0.27 -0.28 -0.16 -0.04 +0.25 +0.36

OPINION POLL

Public Opinion on Corruption—Comparison of the South Caucasus Countries 2013/14

Sources: Caucasus Research Resource Centers (CRRC) opinion polls: Caucasus Barometer 2013; Attitudes towards the Judicial System in Georgia, 2014

Figure 1: Which Problem is Currently the Most Important One in Our Country? (Percentage of Respondents Mentioning Corruption, 2013/14)

1% 5% 7%

39%

26%

0%

10%

20%

30%

40%

50%

Georgia Armenia Azerbaijan Russia 2013 Russia 2014

CAUCASUS ANALYTICAL DIGEST No. 78, 5 October 2015 16

Public Opinion on Corruption in Georgia 2014/15All surveys conducted by the Caucasus Research Resource Centers (CRRC); Details about the surveys are given at the end of this section.Figure 1: During the Last 12 Months, Have You Or Your Family Member Been Asked To Pay a

Bribe (Both Monetary Or Non-Monetary) For a Public Service?

Source: Transparency International Georgia’s public opinion poll, 2015

Figure 2: Concerning Corruption, How Do You Think the Situation Has Changed In Georgia Compared To October 2012?

Yes0

No99

DK/RA1

for the better11

no change46

for the worse28

DK/RA15

Source: NDI public opinion poll, April 2015

Figure 3: In Your Opinion, since parliamentary Elections Of October 1, 2012, How Common Is It For Georgian Officials To Use Their Position For Own Purposes?

Source: TI Georgia’s public opinion poll, 2015

not common at all6

not really common11

partly common, partly not

31

rather common 21 very common

4

DK/RA27

CAUCASUS ANALYTICAL DIGEST No. 78, 5 October 2015 17

Figure 5: What Do You Think Happens To The Money Collected Through Taxes Paid By The Geor-gian Citizens? The Money Illegally Goes To The Pockets Of Government Representatives

Mentioned23

Not mentioned55

DK/RA22

Source: public opinion poll—Volunteering and civic participation in Georgia, 2014

Figure 6: In Your Opinion, How Justified Or Unjustified Is It For Georgian Officials To Employ Their Relatives, Friends Or Fellow Party Members In The Public Sector Without Fair Competition?

not justified at all48

rather not justified 20

partly justified, partly not17

rather justified4

completely justified1DK/RA

11

Source: TI Georgia’s public opinion poll, 2015

Figure 7: To What Extent Do You Agree Or Disagree With The Opinion That Judges In Geor-gia Take Bribes?

Note: The question was converted from a 10-point scale into a 5-point scale Source: public opinion poll—Attitudes towards the Judicial System in Georgia, 2014

completely disagree39

somewhat disagree9

neither agree, nor disagree

14

somewhat agree6

completely agree3

DK/RA30

CAUCASUS ANALYTICAL DIGEST No. 78, 5 October 2015 18

Figure 8: Do You Agree Or Not With the Statement That As a Result Of the Change In the Prescription Policy, Corruption Appeared In Pharmacies?

Source: TI Georgia’s public opinion poll, 2015

Yes11

More or less18

No26

DK/RA46

Results and documentations of the public opinion polls quoted above are available online:

Caucasus Barometer<http://www.crrccenters.org/20146/Online-Data-Analysis> (results)<http://www.crrccenters.org/20119/Project-Overview> (documentation)

TI Georgia’s public opinion poll<http://www.crrccenters.org/209131/CRRC-Georgia-conducted-first-full-scale-tablet-based-survey-for-Transparency-International-Georgia> (documentation)

Public Opinion Poll—Attitudes towards the Judicial System in Georgia<http://caucasusbarometer.org/en/ji2014ge/codebook/> (results)<http://www.crrccenters.org/20587/Attitudes-towards-the-Judicial-System-in-Georgia> (documentation)

NDI public opinion poll, April 2015<https://www.ndi.org/April-2015-Public-Opinion-Poll-Georgia> (results)<https://www.ndi.org/NDI-Poll-Georgians-concerned-about-jobs-economy> (documentation)

19CAUCASUS ANALYTICAL DIGEST No. 78, 5 October 2015

CHRONICLE

Compiled by Lili Di PuppoFor the full chronicle since 2009 see <www.laender-analysen.de/cad>

4 September – 5 October 20154 September 2015 Norway’s Foreign Minister Børge Brende says in Tbilisi that Georgia can rely on the support of Nordic

and Baltic states, including during the forthcoming NATO summit 7 September 2015 Armenian President Serzh Sarkisian secures 200 million USD during a visit to Russia to be used to mod-

ernize the Armenian military as well as a 25 USD gas price cut8 September 2015 Georgian Prime Minister Irakli Garibashvili meets with Kyrgyz Foreign Minister Erlan Abdyldaev dur-

ing a stopover in Bishkek on the way to an official visit in China9 September 2015 Georgian Defense Minister Tina Khidasheli starts a tour of European countries, including Poland, the

Baltic States and the United Kingdom, as part of an effort to “consolidate” support for Georgia ahead of the NATO summit in Warsaw next year

10 September 2015 Georgian Prime Minister Irakli Garibashvili meets with Chinese Premier Li Keqiang on the sideline of the World Economic Forum in the Chinese port city of Dalian to discuss launching free trade talks between the two countries

11 September 2015 Azerbaijan cancels a visit by a European Commission delegation citing a European Parliament resolution that condemns the country’s human rights situation

12 September 2015 Armenian police in the capital Yerevan use force to clear demonstrators protesting recent electricity price hikes

14 September 2015 Georgian Prime Minister Irakli Garibashvili slams a protest by grape growers over low prices in Geor-gia’s eastern region of Kakheti as a “provocation” by the opposition United National Movement party

15 September 2015 Azerbaijani President Ilham Aliyev criticizes a European Parliament resolution that condemns Azerbai-jan’s human rights situation during a joint press conference with Czech President Milos Zeman in Baku

15 September 2015 The head of the EU Monitoring Mission (EUMM) in Georgia, Kęstutis Jankauskas, meets with Rus-sian Deputy Foreign Minister Grigory Karasin in Moscow as part of the first visit of a EUMM head to Russia since 2011

17 September 2015 Former mayor of Tbilisi and one of the leaders of the United National Movement opposition party, Gigi Ugulava, receives a prison sentence of 4.5 years for misspending public funds while serving as mayor

22 September 2015 A taxi driver in the Azerbaijani city of Sumqayit dies following a self-immolation to protest alleged mis-conduct by local police in the seventh self-immolation protest since the beginning of 2014

25 September 2015 Georgian Energy Minister Kakha Kaladze meets with chief executive of Russia’s Gazprom Alexei Miller in Brussels to discuss cooperation in the gas sector

25 September 2015 Armenian police say that three civilians have been killed by gunfire from Azerbaijani forces in villages near the two countries’ border

26 September 2015 Armenian President Serzh Sarkisian tells a government commission that Azerbaijan is guilty of a “blatant violation of the cease-fire” signed in 1994 to end the Nagorno-Karabakh conflict

28 September 2015 Georgian President Giorgi Margvelashvili signs a bill into law that introduces new rules for electing the chief prosecutor

30 September 2015 Foreign Ministers of Georgia, Moldova and Ukraine hold a joint meeting with US Deputy Secretary of State Antony Blinken on the sideline of the UN General Assembly to discuss “security challenges and regional cooperation”

1 October 2015 Georgian Prime Minister Irakli Garibashvili says that Georgia’s “future is bright” during a speech before the UN General Assembly, while stating Georgia’s NATO aspirations and mentioning developing “strong relations” with China

5 October 2015 The Armenian parliament votes to hold a referendum to change the constitution in order to introduce a parliamentary republic whereby the president will no longer be elected by direct vote, but by parliament

5 October 2015 Opposition groups protest against proposed changes to the Armenian constitution outside of the Parliament in the capital Yerevan, fearing that these changes would allow President Serzh Sarkisian to remain in power

5 October 2015 A court in the Georgian town of Kutaisi orders the pretrial detention of three activists of the United National Movement opposition party over an incident involving a confrontation with a lawmaker of the Georgian Dream party

CAUCASUS ANALYTICAL DIGEST No. 78, 5 October 2015 20

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Editors: Tamara Brunner, Lili Di Puppo, Iris Kempe, Natia Mestvirishvili, Matthias Neumann, Robert Orttung, Jeronim Perović, Heiko PleinesThe Caucasus Analytical Digest (CAD) is a monthly internet publication jointly produced by the Caucasus Research Resource Centers (<http://www.crrccenters.org/>), the Research Centre for East European Studies at the University of Bremen (<www.forschungsstelle.uni-bremen.de>), the Institute for European, Russian and Eurasian Studies of the George Washington University (<www.gwu.edu/~ieresgwu>), the Resource Security Institute in Washington, DC (<resourcesecurityinstitute.org/>), the Center for Security Studies (CSS) at ETH Zurich (<www.css.ethz.ch>), and the German Association for East European Studies (DGO). The Caucasus Analytical Digest analyzes the political, economic, and social situation in the three South Caucasus states of Armenia, Azerbaijan and Georgia within the context of international and security dimensions of this region’s development. CAD is supported by a grant from ASCN (<www.ascn.ch>).To subscribe or unsubscribe to the Caucasus Analytical Digest, please visit our web page at <www.css.ethz.ch/cad>An online archive with indices (topics, countries, authors) is available at <www.laender-analysen.de/cad>

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The Center for Security Studies (CSS) at the Swiss Federal Institute of Technology (ETH Zurich) is a Swiss academic center of competence that specializes in research, teaching, and information services in the fields of international and Swiss security stud-ies. The CSS also acts as a consultant to various political bodies and the general public.

Research Centre for East European Studies at the University of Bremen

Founded in 1982, the Research Centre for East European Studies (Forschungsstelle Osteuropa) at the University of Bremen is ded-icated to the interdisciplinary analysis of socialist and post-socialist developments in the countries of Central and Eastern Europe.

The Institute for European, Russian and Eurasian Studies, The Elliott School of International Affairs, The George Washington University

The Institute for European, Russian and Eurasian Studies is home to a Master’s program in European and Eurasian Studies, fac-ulty members from political science, history, economics, sociology, anthropology, language and literature, and other fields, vis-iting scholars from around the world, research associates, graduate student fellows, and a rich assortment of brown bag lunches, seminars, public lectures, and conferences.

Resource Security Institute

The Resource Security Institute (RSI) is a non-profit organization devoted to improving understanding about global energy secu-rity, particularly as it relates to Eurasia. We do this through collaborating on the publication of electronic newsletters, articles, books and public presentations.

Caucasus Research Resource Centers

The Caucasus Research Resource Centers program (CRRC) is a network of research centers in Armenia, Azerbaijan and Georgia. We strengthen social science research and public policy analysis in the South Caucasus. A partnership between the Carnegie Cor-poration of New York, the Eurasia Partnership Foundation, and local universities, the CRRC network integrates research, train-ing and scholarly collaboration in the region.

ASCN

ASCN <www.ascn.ch> is a programme aimed at promoting the social sciences and humanities in the South Caucasus (primar-ily Georgia and Armenia). Its different activities foster the emergence of a new generation of talented scholars. Promising junior researchers receive support through research projects, capacity-building trainings and scholarships. The programme emphasizes the advancement of individuals who, thanks to their ASCN experience, become better integrated in international academic networks. The ASCN programme is coordinated and operated by the Interfaculty Institute for Central and Eastern Europe (IICEE) at the University of Fribourg (Switzerland). It is initiated and supported by Gebert Rüf Stiftung <http://www.grstiftung.ch/en.html>.